Okay, so I have a response from Falkor.
From their main "info" email, they told me that since the model has been discontinued and out of warranty period, there's nothing they can/would do for me.
I also directly emailed a representative who was once active on the 'Hide, and he was certainly more helpful. He didn't seem to think that the barrel extension was damaged, but maybe its just hard to see on pictures. He stated that while the rifle doesn't have an accuracy guarantee, it should be capable of consistent sub-MOA. He also re-iterated that the gouges on the bullets were likely caused by the feed ramps on the extension, and they could polish it for me. However that would come at a cost of shipping rifle there + $75/hr gunsmithing rate + $75 to ship back to me.
I decided to reach out to Proof as well, since it is their barrel and barrel extension, to see what they say. I think they were also the ones that donated the rifle to the SHC. I just sent them an email, so waiting to hear their response.
So now I'm left wondering if I need to spend $200-250 to send it off to polish the feed ramps (and that still may not address the accuracy issues), do I just put that money towards a Craddock RTR in .223 wylde or 6 ARC?